UK aims to speed up defence contracts, finance minister says

LONDON (Reuters) - British finance minister Rachel Reeves wants to speed up the procurement of defence equipment, after the country announced plans to lift military spending following U.S. President Donald Trump's call for Europe to do more to protect itself.

Trump has since paused military aid to Ukraine heaping pressure on Britain and its allies to step-up alternative support for Kyiv, and adding fresh impetus to the need to accelerate the production of munitions and other kit.

Reeves will tell a conference for British manufacturers later on Tuesday that the government wants to cut red tape to help deliver new equipment more quickly, and learn from the steps taken in the last three years to rapidly secure arms for Ukraine.

Defence will become a "cornerstone" of the government's industrial strategy, she will say, adding that more defence contracts will be opened up to small and medium size companies, enabling Britain to "meet emerging global threats head on".

In future, more companies will be permitted to bid for defence contracts, Reeves will say, in a move she hopes will drive innovation and deliver value for money.

Prime Minister Keir Starmer announced last week he would increase annual defence spending to 2.5% of GDP by 2027 and target a 3% level, opening up new opportunities for Britain's biggest defence companies, including BAE Systems and Babcock.

The government is due to publish its Strategic Defence Review this spring, which companies hope will provide further detail on what type of equipment and technology Britain is going to prioritise.

(Reporting by Sachin Ravikumar, writing by Sarah Young; Editing by Sachin Ravikumar and William James)